Liz Truss wins race to be Britain's new leader

By Rob Picheta, Luke McGee, Ed Upright and Aditi Sangal, CNN

Updated 1419 GMT (2219 HKT) September 5, 2022
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8:56 a.m. ET, September 5, 2022

BREAKING: Liz Truss will be the new British prime minister

Liz Truss speaks after being announced as Britain's next Prime Minister at The Queen Elizabeth II Centre in London, Britain, on September 5.
Liz Truss speaks after being announced as Britain's next Prime Minister at The Queen Elizabeth II Centre in London, Britain, on September 5. (Hannah McKay/Reuters)

Liz Truss — a tax-cutting crusader who has modeled herself on Margaret Thatcher and endeared herself to the Conservative Party’s pro-Brexit right wing — has won its leadership election and will take over from Boris Johnson tomorrow as the UK’s new leader.

WATCH: See the moment Liz Truss is announced new British prime minister

7:09 a.m. ET, September 5, 2022

British pound drops to lowest level against the dollar since 1985

From CNN's Livvy Doherty

The British pound dropped to its lowest level against the US dollar since 1985 on Monday, signaling further woes for the UK economy.

Early Monday morning the pound dropped 0.3% to $1.1443 according to MarketWatch. It follows similar falls for the euro as the continent faces a deepening energy crisis.

This signals one of the many challenges that Boris Johnson's successor — the new UK prime minister — will face.

6:35 a.m. ET, September 5, 2022

The next British leader must tackle a cost-of-living crisis from day one

The next prime minister's celebrations are likely to be brief.

That's because the biggest issue in Britain today isn't the identity of the PM, but a spiralling cost-of-living crisis.

Average annual energy bills alone are set to rise 80% to £3,549 (approximately $4,180) from October – threatening to overwhelm much of the country. Inflation rose above 10% in July for the first time in 40 years, driven largely by the soaring cost of energy, food and fuel amid Russia’s invasion of Ukraine.

According to the Bank of England, inflation will soar to 13% by the end of the year. The central bank also predicted that the UK will enter recession before the end of the year.

As far as this affects the Conservative Party leadership contest, analysts are skeptical that either candidate’s policies will help. The Institute for Fiscal studies, an independent research group, last month said the leadership contestants, who both promise tax cuts and smaller government spending, “need to recognise this even greater-than-usual uncertainty in the public finances.”

On Sunday, speaking on a BBC political show, the contest's clear frontrunner Truss refused to discuss her plans to tackle rising bills, but added, “what I want to reassure people is, I will act if elected as prime minister within one week.”

Rishi Sunak has consistently attacked Truss's economic agenda, saying that her proposed tax cuts would push inflation even higher. And if Truss wins today, she'll immediately face pressure to match the opposition Labour Party's plan to freeze energy bills before a planned price hike in October.

6:05 a.m. ET, September 5, 2022

What happens to Boris Johnson now?

Ex-Prime Minister Boris Johnson speaks in the UK Parliament on December 8.
Ex-Prime Minister Boris Johnson speaks in the UK Parliament on December 8. (Jessica Taylor/UK Parliament/Reuters)

That’s the question that Westminster is desperate to learn the answer to. Immediately, Boris Johnson will go from being prime minister to an ordinary Conservative MP. It is most unlikely he will serve in either Sunak or Truss’s cabinet, given his unpopularity. 

He will probably return to his media career as a columnist, author and broadcaster in some way or another. He was a columnist at the Daily Telegraph for many years, both while serving as an elected politician and as a private citizen. His salary for that column was greater than his salary for serving as prime minister. 

It is unknown whether or not Johnson wants to return to frontline politics or if he now wants to retreat, possibly even resigning as an MP, and live a quieter life. While that would be understandable, allies of Johnson believe that he is dissatisfied with how his time in power came to an end and feels that he has unfinished business. 

There may be hurdles to overcome if he wants to remain a force in British politics, though. If an ongoing parliamentary inquiry finds later this year that he deliberately misled parliament over Partygate, Johnson could face a recall election and lose his seat.

But looming over Truss or Sunak is the uncomfortable truth that the public hasn’t had any say yet in Johnson’s removal or the appointment of his successor. If things start going badly for the next prime minister, it would be theoretically possible for the Conservative Party to remove them and restore Johnson as its leader.

5:48 a.m. ET, September 5, 2022

What awaits Britain's new leader?

Lots of not very fun things. The most pressing issue is the cost-of-living crisis. Energy prices have soared by thousands of pounds, food costs are spiraling and real-term wages are falling. Small businesses that were saved by the government in the pandemic, especially in the hospitality industry, now face closure due to the escalation in prices.

Neither candidate has adequately answered how they intend to address these problems and the public are increasingly furious about it.  

On top of this economic crisis, there are also a bunch of problems that can loosely be described as Boris Johnson legacy issues. 

Johnson has been one of the most vocal and reliable allies to Ukraine since the Russian invasion in February.

The new leader will have to decide whether or not they will follow Johnson’s all-in approach as the rest of the West works out how to face the next stage of the war, with the risk of attracting unfavorable comparisons with Johnson should they deviate from his resolute position. 

Then there’s Brexit, which, contrary to popular belief, is certainly not done. The situation in Northern Ireland remains unstable and British relations with their European Union counterparts are extremely poor.

The new PM will have to decide whether they intend to remain hardline on all matters Brexit and risk the consequences, or take a softer line, angering the Brexiteer base and, well, risk the consequences. 

Read more here: Boris Johnson is handing his successor an economic ‘catastrophe’

5:18 a.m. ET, September 5, 2022

Who's choosing the new PM?

Audience members hold placards showing support for each candidate at a Conservative Party hustings on August 1, in Exeter, England.
Audience members hold placards showing support for each candidate at a Conservative Party hustings on August 1, in Exeter, England. (Finnbarr Webster/Getty Images)

In the United Kingdom, prime ministers are not directly elected; rather, parties are elected at general elections via a parliamentary system where local constituencies elect a Member of Parliament. 

The leader of the party with the most MPs -- and ideally an outright majority in the 650-seat Parliament -- will conventionally be asked to form a government by the Queen. 

If a sitting prime minister resigns, there is no need for another general election, so the governing party is able to simply elect a new leader. 

In the case of the Conservative Party, the new leader is elected by its roughly 160,000 members. This electorate is generally speaking older, whiter and more financially comfortable than the rest of the country. They are typically in favor of low tax, small government spending and socially Conservative policies. 

This could be why the campaigns to replace Johnson have not fully addressed the cost-of-living crisis looming over most people in the UK, focusing on lowering tax rather than what state spending might be required.

5:14 a.m. ET, September 5, 2022

Why is the Conservative Party picking Boris Johnson's successor?

Prime Minister Boris Johnson addresses the nation as he announces his resignation outside 10 Downing Street in London, England, on July 7.
Prime Minister Boris Johnson addresses the nation as he announces his resignation outside 10 Downing Street in London, England, on July 7. (Dan Kitwood/Getty Images)

Boris Johnson resigned after his own party decided that his time was up at the start of July. Frustration at how Johnson handled a scandal in which his deputy chief whip, Chris Pincher, was accused of sexually assaulting two men spilled over into anger. The prime minister was forced to resign after losing the support of virtually all his lawmakers as well as dozens of ministers in his government. 

The Pincher scandal came after months of speculation that Johnson would need to step down over the so-called Partygate scandal, which revealed that multiple illegal gatherings had taken place at the heart of government while the rest of the country was living under strict lockdowns during the Covid-19 pandemic.

Johnson himself was found to have broken the law as part of an investigation into this scandal. 

5:12 a.m. ET, September 5, 2022

Britain braces for its next leader

Liz Truss, left, or Rishi Sunak, will be announced as the Conservative Party's new leader on September 5.
Liz Truss, left, or Rishi Sunak, will be announced as the Conservative Party's new leader on September 5. (Getty Images)

The United Kingdom will today learn who will replace Boris Johnson as its prime minister. 

At approximately 12:30 p.m. in London (7:30 a.m. ET), the governing Conservative Party will announce the winner of its leadership contest. 

The process was triggered after Johnson resigned as leader on July 7 after months of scandals rendered his position untenable. 

He will be replaced by either Rishi Sunak, the former Chancellor of the Exchequer who resigned from Johnson’s Cabinet in protest, or Liz Truss, the current foreign secretary. 

The winner will inherit a country living through the worst cost-of-living crisis in recent memory and a party bitterly divided following Johnson’s divisive premiership.